In Depth

The Indiana Supreme Court has given state casinos a double win, strengthening their rights by saying they can exclude card-counters
and that problem gamblers can’t recover damages stemming from gambling losses as long as the casinos are following state
regulations.

While casinos triumphed in the dual rulings, the state’s top jurists disagreed on how the two appeals should
be resolved when it comes to the intersection of common-law rights and state gambling statutes. In one case, the court decided
legislators overrode a gambler’s common-law right to recover damages because of the regulatory scheme on the gaming
industry. But in the other case, the justices found that casinos’ common-law right as a business to exclude certain
patrons trumps those same state regulations.

In Donovan, the Grand Victoria Casino and Resort at Rising Sun in 2006 banned Thomas P. Donovan, a retired computer
programmer from Indianapolis who’s won about $65,000 playing blackjack since 1999. He sued on grounds that the casino
had breached a contract and the trial court in Marion County granted summary judgment to the casino. The Court of Appeals
reversed on the exclusion issue and held Donovan was entitled to a declaratory judgment that the casino couldn’t exclude
him for counting cards.

The case drew statewide attention, including an opinion from Gov. Mitch Daniels during a commencement speech where he rooted
in favor of Donovan because it appeared he used his intelligence and skill to win rather than luck.

But in its ruling Thursday, the Supreme Court held that businesses have a common-law right to exclude a visitor or customer,
subject only to civil rights laws.

"This long-standing common law right of private property owners extends to the operator of a riverboat casino that wishes
to exclude a patron for employing strategies designed to give the patron a statistical advantage over the casino," Justice
Frank Sullivan Jr. wrote for the majority.

Justice Robert D. Rucker didn’t participate in the case, leaving only the four justices to decide it. Justice Brent
Dickson was the sole dissenter, criticizing the court’s common-law analysis that differed from the other casino case
issued the same day. He said the casinos exist in Indiana only by the recent permission of the General Assembly, and that
they have a common-law duty to serve the general public.

"Permitting a casino to restrict its patrons only to those customers who lack the skill and ability to play such games
well intrudes upon principles of fair and equal competition and provides unfair financial advantages and rewards to casino
operators," he wrote.

Justice Dickson said the court should use the same common-law rationale as it outlined in its separate Kephart decision,
in which he also dissented.

The Kephart case is out of Harrison Circuit Court and involved a Tennessee woman who lost $125,000 in a single night
of gambling at what is now known as Horseshoe Southern Indiana casino along the Ohio River. The casino sued to recover the
money it had lent it her, and Genevieve Kephart counter-sued on a claim that the casino had a common-law duty to protect her
because it knew of her pathological gambling history and it used that to entice her with free meals and rooms, provided a
car to drive her from Tennessee to Indiana to gamble and lent her credit to support her habit. The trial court declined to
dismiss the case on that issue and the Court of Appeals reversed. The justices granted transfer.

In a 4-1 decision authored by Justice Rucker, the court ruled that problem gamblers have the responsibility to look after
themselves and casinos can't be expected to protect them if they don't – one of those options used in this case
was a voluntary exclusion program allowing compulsive gamblers to place their names on a list of patrons to be banned from
casinos.

“In this case, not only does the statutory scheme cover the entire subject of riverboat gambling, but the statutory
scheme and Kephart’s common law claim are so incompatible that they cannot both occupy the same space,” Justice
Rucker wrote. “The existence of the voluntary exclusion program suggests the legislature intended pathological gamblers
to take personal responsibility to prevent and protect themselves against compulsive gambling. To allow Kephart’s claim
to go forward under the common law would shift primary responsibility from the gambler to casino.”

Chief Justice Randall T. Shepard and Justice Sullivan concurred while Justice Theodore Boehm concurred in result and offered
an analysis of a nearly 20-year-old standard used to reach the decision, saying that the three-part test detailed in Webb
v. Jarvis, 575 N.E. 2d 992, 995 (Ind. 1991), causes more confusion than light.

In his dissent, though, Justice Dickson described the result of this case as particularly disturbing because it goes against
long-established common-law rights and he disagreed with how the majority used an “implied abrogation” standard
for Kephart but came to a different decision in Donovan.

“Nowhere in Indiana’s statutory system of gambling regulation is there any provision that expressly or unmistakably
abrogates Indiana’s common law requiring business operators to exercise reasonable care for the safety of their customers
and subjecting them to accountability in damages for failing to do so,” he wrote.